I am a part of a student committee in a Govt. run Institute. The objective of our committee is to gain first hand experience of equities market by investing in the equities market.We have a seed fund raised through competitions held within the college. After consultation with our taxation and legal aspects lecturer H.P. Ranina sir, we came to the conclusion that setting up a public trust would be the best options. We do not wish to claim any exemptions under the section 12 of the I.T. Act.
Some questions have arisen after referring the bare acts of Bombay Public Trusts(BPT) and I.T. Act:
1. Is it necessary to register a public trust whose objective is not of charitable or religious purpose?
2. Since the resources of the committee are limited to only Rs. 10,000 which may further grow through membership drives, is it necessary to audit the accounts of the trust even if it is not involved in charitable or religious activities?
3. If yes, then what is the limit? Also, kindly state the act and section.
4. Since it is a student committee, we have a procedure of senior committee trustees resigning from committee post passing out from the institute. Prior to resigning, they promote 2 junior members as trustees after a voting by them and other members.
Is the procedure complaint/acceptable under the BPT Act?
5. Is the individual tax slab applicable to trust in the current scenario?
6. If we collect bi-annual membership fees from the junior batch next year, then is it taxable under I.T Act?
7. Also is it permissible under the above acts to collect membership fees? The members shall get benefits of a fortnightly publication.
8. Any suggestions for registration are welcome.
As our resources are limited, we cannot afford to approach a legal/tax consultant. Our student committee shall really thankful to those who volunteer to give their valuable suggestions.